133. Barry’s BBQ had sales revenue for the year of $200 million and net income of $20 million.. Total assets were $70 million at the beginning of the year, and $80 million at the end of the year. Calculate Barry’s return on assets, profit margin, and asset turnover ratios.
134. Paul Pierce Enterprises reports net income of $800,000, average total assets of $2,400,000, and average total liabilities of $400,000. Calculate the return on assets and return on equity ratios.
135. Phillip’s Fun Center has go-karts, miniature golf, bumper boats, paintball, and laser tag. Determine whether the company should report each of the following items as discontinued operations, extraordinary items, or other expenses:
1. Uninsured losses of $200,000 were incurred due to a hurricane that swept through the area for the first time in 50 years.
2. The company sold its old go-karts at a loss of $25,000 and replaced them with all new go-karts.
3. The company sold its laser tag center at a loss of $10,000 to focus on the other more profitable segments. Laser tag is considered to be a separate business segment.
4. The company restructured its business at a cost of $75,000, replacing some employee positions with automated equipment.
Answer:
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1. Extraordinary items.
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2. Other expenses.
3. Discontinued operations.
4. Other expenses.
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Learning Objective: 05
Difficulty: Medium
AACSB: Reflective Thinking
AICPA: FN Reporting
Blooms: Understand